EP Electric has identified two new methods to treat its cooling water. Alternative I $($for inflow$)$ would treat the raw water with a conventional reverse osmosis

system so that the cycles of concentration could be increased from $5$ to $20.$ This will result in water cost savings of $$360,000$ per year and chemical cost

savings of $$56,000$ per year. The initial cost of the equipment will be $$2\mathrm{.}3$ million with an operating cost $$125,000$ per year.

Alternative B $($for blowdown$)$ will treat the cooling tower blowdown water using a high$-$pressure seawater reverse osmosis system to recover most of the

water that is sent to an evaporation pond. This option will result in water savings of $$270,000$ per year. The cost of the system will be $$1\mathrm{.}2$ million with an

operating cost of $$105,000$ per year. Assuming one of the two methods must be installed, determine which is preferred on the basis of the incremental ROR

value using a MARR of $5\%$ per year, which is a typically low return expected of government projects. Use a $10-$year study period with no salvage value for

either system, two methods of cooling water treatment are analyzed. These are revenue alternatives which generate annual savings against their costs.

Required:

Note: Use rows $2$ and $3$ from the given information to complete this question.

a$.$ Perform the complete procedure for incremental ROR analysis for revenue alternatives to determine

which method to select at MARR $=5\%$ per year.